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Examining the relationship between farm size and productive efficiency: a Bayesian directional distance function approach
Author(s) -
Khataza Robertson R.B.,
Hailu Atakelty,
Doole Graeme J.,
Kragt Marit E.,
Alene Arega D.
Publication year - 2019
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/agec.12480
Subject(s) - inefficiency , production (economics) , productivity , economics , food security , production–possibility frontier , agricultural economics , bayesian probability , function (biology) , productive efficiency , lease , econometrics , industrial organization , microeconomics , agricultural science , mathematics , agriculture , statistics , environmental science , ecology , finance , evolutionary biology , biology , macroeconomics
Achieving sustainable food security and increased farm income will depend on how efficient production systems are in converting available inputs to produce outputs. Using data from Malawi, we estimate a Bayesian directional technology distance function to examine the relationship between farm size and technical efficiency. Our results support the existence of an inverse relationship between farm size and productive efficiency, where small farms are more efficient than large farms. On average, farms exhibit inefficiency levels of 60%, suggesting that productivity could be improved substantially. Improving productive efficiency and food security will require farms to operate in ways where the size of cultivated area is matched by nonland production inputs such as labor, fertilizer, and improved seeds. The results highlight the need for policies that could incentivize farmers to adopt productivity‐enhancing technologies and, where possible, to allocate excess land to lease markets.